The HR Consultant Smack Down is Coming

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Expert Perspective by Grahall’s OmniMedia Editorial Board

expert perspective telescopeAlthough the media has moved onto other topics (from the renewed vigor of the markets to rumors about the role Michael Jackson’s doctor played in his untimely death) the HR Consulting community continues to boil over with conversations and considerations about how to take advantage of the pending merger of Towers Perrin and Watson Wyatt. 

Much to the delight of the developers of 5500 and other federal reporting databases, consultants are furiously purchasing, parsing and studying government filings to extract information about the Towers and Watson clients in order to determine where there might be overlap of services that could lead to new client opportunities.  Certainly Towers and Watson are working equally as furiously to secure and support client relationships in the face of what they know will be a coming onslaught. So who will be in the ring for the “battle royale”? Certainly we’ll see Hulk Hewitt, Merciless Mercer, Brutal Buck, among others as part of this epic rumble.

So will Grahall be part if this “smack down”?  Well we certainly believe that our approach is best and, in fact, the market is moving towards our strengths:  rigorous scientific method and ability to tailor programs to a company’s business and people strategies.  We want to serve companies who desire to better align their business and people strategies with comprehensive rewards strategies rather than just deliver “me too” rewards program.  We will certainly share our perspectives with any and all companies who are interested in a custom, surgical, highly risk managed approach to total rewards linked to business strategy. 

“Ambulance chasing” behind the pending Watson and Towers merger is not the only, and certainly not the best opportunity presented to compensation consultants today. We think that consultants, and in particular compensation consultants, are on a precipice of major change.  As a Chinese businessman once shared with Grahall’s Michael Graham, the future is happening today, you just have to find where it is happening and open your eyes to see it.   We see demand for compensation consultants growing dramatically in the coming years.  A recent Equilar report [www.equilar.com] shows that most Boards of the Fortune 1000 companies retain compensation consultants and that also for these companies there is a growing demand on the part of management to retain consultants as well. 

Presently 18% of the Fortune 1000 management teams retain compensation consultants.  We see this percentage moving upward and would not be surprised to see this number at or even above 50% in the next few years.  Then beyond this, we see a situation for the top CEO’s much like the “free agency” system much favored by sports stars and Hollywood celebriities.  We predict that Super Star CEO’s will hire ”agents” (i.e. consultants), to help manage their careers and their compensation. 

Is this coming increase in advisors a good thing? Well certainly for the compensation consultants it is. Not only will more consultants be hired to work for management, but with these more adversarial situations, the fees for these assignments will increase as well.  But beyond this “Executive Compensation Consultant Full Employment Act”, with each party having its own advisor we expect there to be an increase in objectivity, honesty and transparency in the process. And that’s a good thing for everybody.

Email Grahall’s Editorial Board Director at edie.kingston@grahall.com

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